Weekly Investor Update (April-WeekFour-2024)

11 min Read April 26, 2024 at 5:00 PM UTC

Monday

BRVM sees second weekly gain on Bernabe, Bicici, BOA rally

Trading on the regional stock exchange BRVM concluded on a positive note last week, despite more stocks falling than rising. Key performers includedBicici(+5.71% to 7,400 FCFA),BOA Benin(+3.72% at 7,240 FCFA), andSIBC(+1.40% at 5,780 FCFA), contributing to the market’s favorable trend.Notably,Bernabé’sstock witnessed a fluctuating trajectory, rising by 4.02% to 1,295 FCFA in the prior week, dipping by 5.41% to 1,225 FCFA the following week, and rebounding by 6.12% to 1,300 FCFA. This volatility is attributed to speculative anticipation of the company’s 2023 annual results.In addition, Bicici secured second place in the top rankings. The stock has maintained strong performance since the beginning of 2024, with a year-long gain of 15.63%. The list of top increases also includesBOA SN(4.63% at 3,505 FCFA) andTotal CI(2.30% at 1,780 FCFA).

Total volume transacted increased by 6.01%, reaching 1.94 billion FCFA compared to the previous week’s 1.83 billion FCFA.BOA CI(-1.03% to 7,200 FCFA) andSonatel(stable at 19,000 FCFA) were the most traded securities, with respective amounts of 325.33 million FCFA and 205.56 million FCFA. In other African markets, the Ghana Stock Exchange saw the best performance in the 16th week, with a 1.82% jump for a GSE-CI standing at 3,504.34 points. Conversely, the Zimbabwe Stock Exchange (-4.38% to 95.99 points), the Kenya Stock Exchange (-3.64% to 106.60 points), and the Nigerian Stock Exchange (-2.71% to 99,539.75 points) comprised the bottom three performers.

Egypt-based Bokra raises $4.6m to provide investment services in MENA

Cairo-based fintech startup Bokra has closed a pre-seed funding round, securing $4.6 million.DisrupTech VenturesandSS Capitalled the investment, with participation from other investors. Bokra aims to revolutionize wealth management in the MENA region by offering goal-based investment and saving products through asset-backed securities.Founded to address diverse financial goals, Bokra empowers retail and SME investors to save and invest across multiple asset classes. Its app provides personalized financial and investment planning, leveraging asset-backed securities for the first time.The funds will fuel the launch of the Bokra app, expansion of investment product offerings, and geographical scaling across the MENA region. In addition, the investment will support Bokra’s mission to raise investment awareness and foster a culture of smart investing tailored to various financial goals and aspirations.

In Africa, existing investment options lock out the vast majority of people due to complexities in market access and high management fees. Egyptian retailers and SMEs specifically, looking to manage their wealth, face challenges that include the lack of personalized investment planning, fragmented applications for asset-class investments, non-transparent fee structures, and high-ticket physical assets. But across the continent, several platform-first startups like Bokra have sprung up with a mission to improve this side of financial access for thousands of Africans, regardless of income level or financial knowledge. A similar startup in Nigeria, Bamboo, in 2022 raised $15 million in a Series A funding round led by American venture capital firms Greycroft and Tiger Global.

TLcom Capital secures $154m to back early-stage startups in Africa

TLcom Capital, a Nairobi-based venture capital firm known for backing successful startups such asVendease,Seamless HR, anduLesson, has hit the final close for TIDE Africa II, a $154 million fund dedicated to supporting early-stage startups. The fund initially reached its first close at $70 million in January 2022 and had anticipated a second close by the end of the same year.The process of reaching and surpassing the funding target spanned over two years, with Maurizio Caio, founder and managing partner at TLcom Capital, attributing the delay to the need for adjustments in documentation due to sizable investments received.TIDE Africa II represents a significant increase from TLcom’s first fund, which closed at $71 million in February 2021. Notable investors in TIDE Africa II include theEuropean Investment Bank(EIB),Allianz,DEGImpact’s joint venture,AfricaGrow,Visa Foundation, andBertelsmann.

Since 2022, startup funding in Africa has slowed, with 2023 seeing a total of $3.2 billion raised, the lowest since $2.1 billion in 2020, as global venture capital interest declined. The departure of 400 investors further exacerbated the situation. Despite this, local venture capital firms like TLcom have increased their activity. Amidst the funding winter, VC activity in Africa remains resilient, with major firms closing new funds. TLcom, traditionally focused on Sub-Saharan Africa, has expanded its scope to include North Africa, beginning with investments in Egyptian logistics startup ILLA and South African fintech littlefish. This strategic shift highlights the potential for growth in North African markets, despite prevailing challenges in the funding landscape.

South African AI startup Spatialedge raises $3.1m to scale

South Africa’s data and applied artificial intelligence (AI) solutions startup,Spatialedge, has secured $3.1 million in funding to advance its mission of revolutionizing the retail sector.Founded in Stellenbosch in 2017, Spatialedge specializes in big data and applied machine learning solutions, empowering companies to swiftly construct and implement robust machine learning solutions.With remarkable growth, exceeding $15.7 million in revenue, Spatialedge has attracted new funding fromHlayisani Capital. The fresh capital infusion will fuel the company’s research and development initiatives, as well as bolster its product portfolio.

Artificial Intelligence has been generating buzz worldwide, and Africa is no exception. With the release of OpenAI’s consumer-facing ChatGPT tool and the viral success of other generative AI tools like Dawn AI, Copy AI, Dall-E, and Midjourney, interest in AI has reached unprecedented heights. These tools leverage vast amounts of data, fast processing, and intelligent algorithms to generate text or images in seconds in response to user prompts. But AI’s impact goes beyond generating text or images; it’s being used to solve a wide range of problems across different sectors globally, including Africa. African startups and businesses are increasingly adopting the technology in fields like healthcare, education, agriculture, transportation, and in Spatialedge’s case, in retail. Quantifying the AI market opportunity in Africa is challenging, but estimates suggest it could reach $190 billion by 2025.

Banks lead the pack as Kenyan stocks pay out $1bn in dividends

Based on data from the Nairobi Securities Exchange (NSE), listed banks accounted for around half of all dividends paid out by firms on the exchange for the year ended December 2023.Dividends per share for banks totaled $506 million, representing a 49% share of the total dividends from all listed companies. Although more payouts are expected from non-banks in the short term, with companies likeSafaricomandJubileedue to release financial statements.However, nearly half of the NSE-listed companies, totaling 30 firms, did not distribute dividends to shareholders in the past year. This includes suspended counters such asDeacons,Kenya Airways, and ARM Cement.

The substantial dividend payouts from the banking sector have attracted investor interest, contributing to notable share price gains throughout the year. Listed banks have seen their share prices surge, with an average increase of 17.4% year-to-date. Equity Group stands out with a remarkable 32.3% surge in its share price. Interestingly, Equity Group also distributed the highest dividend payout to shareholders in absolute terms. Other notable banking sector dividend payers include StanChart, Co-op Bank, and Absa Bank Kenya. NCBA Group ranks higher than Stanbic Holdings Plc, I&M Holdings, BK Group, and DTB in terms of dividend payouts. However, Housing Finance Group and KCB were the exceptions among banks, as they did not pay dividends. KCB attributed its decision to skip dividends to the need to preserve capital adequacy buffers amidst elevated expenses, including high loan provisioning costs, as it heads into 2024.

Bitcoin price starts the week bullish after first halving since 2020

Bitcoin saw a modest rise at the beginning of the week following the completion of its fourth halving on Friday, resulting in reduced incentives for Bitcoin miners.The cryptocurrency’s price increased by 2.86% to $66,560.39, according to Coin Metrics, while Ether rose 1.24% to $3,187.67. Public cryptocurrency miners’ stocks also climbed after rallying ahead of the halving.Since theBitcoinsupply halving three days ago, which halved miner rewards from 6.25 BTC per block to 3.125 BTC, the pioneer cryptocurrency’s price has been up by around 5%. Some market participants are speculating about whether Bitcoin will sustain its upward trajectory post-halving.

The Bitcoin halving reduces the rewards given to miners by half and occurs approximately every four years, following the protocol outlined in the Bitcoin code. Its purpose is to decrease the issuance of bitcoins, fostering scarcity and preserving the cryptocurrency’s digital, gold-like characteristics. Typically, investors anticipate minimal immediate price movement in bitcoin surrounding the halving, as its effects historically take several months to manifest in the cryptocurrency’s price. However, JPMorgan has expressed concerns about potential short-term downside risks for bitcoin.

New incubator launched to support African health-tech innovators

Pishon Health, an African healthcare innovation incubator, has launched its Social Innovation Incubator program, designed to support innovators developing tech-driven solutions in healthcare.The 12-week program offers access to training, mentorship, and potential funding, with services valued at up to $100,000. By providing mentorship, capital, and advisory services, the program aims to assist healthcare innovators in refining and scaling their solutions.Through this initiative, Pishon Health seeks to empower startups in navigating the complexities of developing and scaling locally relevant healthcare solutions, fostering the growth of the next generation of African innovators in the healthcare sector.

The surge of the COVID-19 pandemic significantly expanded the digital health ecosystem in Africa, prompting numerous startups to address existing and emerging challenges in the healthcare sector. The industry is revolutionizing patient care through various means while African governments are also engaging in partnerships with innovators to grow the ecosystem. A Salient Advisory report found nearly 50 collaborations in 2022 between health startups and African governments. The digital health market in Africa will experience a growth rate of 15.42% between 2023 and 2027, resulting in a market of $10.42 billion by 2027. This underscores the significant potential for expansion and the importance of having incubators support early-stage players.

Air Côte d’Ivoire to debut commercial flight to Casablanca in May

Air Côte d’Ivoire is expanding its services to North Africa with the introduction of flights to Casablanca, the economic capital of Morocco. The airline’s inaugural commercial flight to the city is scheduled for May 14.Operating from its hub at Félix Houphouët-Boigny International Airport in Abidjan,Air Côte d’Ivoirewill offer four weekly flights, departing every Thursday, Sunday at 8:30 a.m., and Tuesday, Friday at 12:20 p.m. Prices for round-trip tickets start from 335,300 FCFA (around 511 euros), including taxes.The carrier enters a market segment currently dominated byRoyal Air Maroc, which has been operating daily flights on the Abidjan – Casablanca route for years, with consistently high occupancy rates according to industry experts.

After more than a decade of operations in African skies since its inception in 2012 with just three aircraft, Air Côte d’Ivoire has become one of the flagships of the Ivorian economy. Establishing its hub in Abidjan, the airline has grown its fleet to 10 aircraft, with additional orders expected from Airbus. Casablanca in the Cherifian Kingdom will mark Air Côte d’Ivoire’s second long-haul service, following Johannesburg in June 2022, and its 26th destination overall, including 21 regional and 5 domestic destinations. Beyond Africa, the company is eyeingexpansion into Europe, with plans to launch service to Paris CDG by the end of 2024, followed by Geneva and Beirut in 2025, London in 2026, and destinations in America such as Washington and New York by 2027.

Disco to invest $2m in EVs, charging stations as Kenya eyes transition

Kenya Power, an electricity distributor, intends to invest Sh258 million ($2 million) over the next three years to bolster the adoption ofelectric vehicles(EVs).This investment comprises purchasingelectric vehicles and motorbikes, along with establishing charging infrastructure nationwide. As part of this initiative, the company inaugurated an EV charging station at its Nairobi headquarters, representing a Sh6.5 million investment.The station includes a 50 kW direct current charger (with a one-hour charging time) and a 22 kW alternating current charger (with a two-hour charging time). In addition,Kenya Powerplans to install nine more chargers by July 2024, further facilitating the transition to e-mobility.

South Africa currently leads the African market for electric vehicles (EVs), although the total number of EVs on South African roads was relatively low, with just over 6,000 in 2020. EVs, including hybrids, accounted for less than 0.2% of new car sales out of a total fleet of 12 million automobiles. In Kenya, there were an estimated 350 EVs, compared to around 2.2 million registered vehicles in use. Despite these relatively small numbers, there has been significant growth in electric vehicle sales on the continent, driven by government incentives such as tax cuts. The Kenyan government, for example, is actively promoting e-mobility by introducing incentives. Kenya Power, the country’s main power supplier, has ambitious plans to convert 2,000 gasoline- and diesel-powered cars and trucks to electric power over the next four years.

This material has been presented for informational and educational purposes only. The views expressed in the articles above are generalized and may not be appropriate for all investors. The information contained in this article should not be construed as, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy or hold, an interest in any security or investment product. There is no guarantee that past performance will recur or result in a positive outcome. Carefully consider your financial situation, including investment objective, time horizon, risk tolerance, and fees prior to making any investment decisions. No level of diversification or asset allocation can ensure profits or guarantee against losses. Articles do not reflect the views of DABA ADVISORS LLC and do not provide investment advice to Daba’s clients. Daba is not engaged in rendering tax, legal or accounting advice. Please consult a qualified professional for this type of service.